5. Choose indemnity type coverage and avoid HMOs whenever possible. This lets you and your doctor maintain control of your medical care. There are no “networks”; you choose your own doctor and hospital and are free to switch at any time. There are no limits on travel, since this type of coverage is equally valid everywhere in country.

6. Take a separate plan if you travel outside U.S. Most U.S. plans provide weak foreign travel benefits and most worldwide plans provide weak coverage in U.S. SO it is best to carry separate plans tailored to your travel schedule.

7. Be aware of state issues. Each state controls its own health insurance laws. Four states – MA, NJ, NY and VT – make it nearly impossible for its individual citizens to buy affordable health insurance. The only legal way around this problem is to take out coverage while living temporarily outside these states.

8. Pay for 3 months of longer. You can save money by paying for more than one month at a time. Since most plans accept credit cards, it even makes financial sense to “charge it” at a lower premium rate and then pay off your own credit card over a few months. The premium discount will usually be lower than credit card finance charges.

9. Avoid lesser-known insurance plans. Health insurance premium rates are based directly on benefits that insurer pays out to policyholders. It makes no sense to enroll into a plan where there is a known issue of claims problems in order to find lower premium rates. Fortunately, market share leaders maintain an excellent reputation for claims handling. Stick to these market share leaders.

10. Use a medical savings account. If you could benefit from making your medical expenses fully tax-deductible, open a medical savings account. There are no account fees or charges for those who qualify for this plan.

These 20 factors are taken from IRS Revenue Ruling 87?41. There is no set number of factors that must be in your favor, so idea is to get as much insurance as possible. We suggest that you meet 15 out of 20 of factors in your favor to be “safe”.

1. Does principal provide instructions to worker about when, where, and how he or she is to perform work? 2. Does principal provide training to worker? 3. Are services provided by worker integrated into principal's business operations? 4. Must services be rendered personally by worker? 5. Does principal hire, supervise and pay assistants to worker? 6. Is there a continuing relationship between principal and worker? 7. Does principal set work hours and schedule? 8. Does worker devote substantially full time to business of principal? 9. Is work performed on principal's premises? 10. Is worker required to perform services in an order or sequence set by principal? 11. Is worker required to submit oral or written reports to principal? 12. Is worker paid by hour, week, or month? 13. Does principal pay business or traveling expenses of worker? 14. Does principal furnish significant tools, materials and equipment? 15. Does worker have a significant investment in facilities? 16. Can worker realize a profit or loss as a result of his or her services? 17. Does worker provide services for more than one firm at a time? 18. Does worker make his or her services available to general public? 19. Does principal have right to discharge worker at will? 20. Can worker terminate his or her relationship with principal any time he or she wishes without incurring liability to principal?

If you cannot easily meet standards of this 20-point test, don’t worry yet. There is another “safe harbor” provision added to tax law a few years ago. If you can show that a substantial portion of your industry uses sub-contractors in same status as your particular position, then you are safe in considering yourself also as a sub-contractor. The difficulty in relying on this safe harbor test is that you need to be reactive to your industry and IRS, rather than be pro-active in designing your business relationships for effect that you desire.